This article was written by Hayati Alaluf, strategy director at OMD EMEA, and originally appeared on The Drum.
Covid-19 has undoubtedly affected all our lives, forcing us to make dramatic changes to the way we live and work to adapt to a new reality. Life will revert to some form of normality once the pandemic is over – hot yoga classes, retail therapy and Friday pub sessions will all resume, and we will finally be able to go and see the new James Bond film on the big screen.
However, given the immense pressures that this pandemic has thrust on society (both at a local and global level), fundamentally altering the way we interact, Covid-19 will also result in some lasting behavioural shifts, particularly when it comes to the way we define and implement digital transformation.
In a time of isolation, many organisations are learning that the secret to successful digital transformation depends, to a large extent, on how they organise and communicate to both their workforce and their consumers. In other words (and perhaps somewhat counter-intuitively), digital transformation is not solely about technology. Now more than ever, the actions organisations take to make their digital transformation strategies relevant to those employees and consumers will have a direct and permanent impact on their success as a business.
Re-imagining the workplace and talent pool
For many organisations, the fact that we are now all digitally connected and can have meetings and do our jobs from the comfort of our own homes raises significant questions about the purpose and relevance of office space. Some may argue that the office remains important as the hub of an organisation and that teams cannot function effectively without regular in-person contact. However, there are certainly those who will have found the new normal of regular video calls (complete with background effects including toddler antics, pet noises and enviable interior decor), as somehow bringing their teams even closer together than before and perhaps leading to a healthier overall attitude to work.
In addition to showcasing the viability of remote working, the pandemic is also offering many a flavour of the potential advantages of relocation to smaller cities, towns or suburbs and still being able to work for major companies “based” in urban hubs. Organisations can benefit from this distributed workforce model since it will unlock a previously untapped pool of local, regional and even international talent, allowing them to recruit teams which transcend conventional organisational and geographical boundaries. This will no doubt also lead to improvements in workforce diversity and help break down traditional biases around age, background, and family structure.
This comes with a challenge many leadership teams have been trying to crack even before the pandemic. With more people working physically apart from each other, the only way to keep teams on the same page and to function effectively is through better collaboration. An important part of collaboration is that organisations need to be flexible when it comes to adoption of new technologies and accepting a gradual redefinition (or flattening) of workforce hierarchies. As always, this kind of change and flexibility needs to be driven and executed from the top to enable individuals at all levels to adapt and buy into the change. On a practical level, effective collaboration requires better communication. In the context of a distributed workforce, for example, encouraging conversation-like, shorter, and instinctive communications between employees at different levels (which may not always be business-focused) may be the key to fostering that all-important sense of team spirit and trust.
Adapting to changes in consumer and media behaviour
Within a very short space of time, the Covid-19 pandemic has dramatically changed consumer behaviour. With shops, bars, cinemas and gyms all closing down, our tablets and TVs have quickly become central to life under quarantine. This has not only led to a dramatic increase in consumption of digital content, products and services but has also brought about the digitalisation of marketing channels which were previously considered “offline only”. Brands will need to respond to this digital transformation by re-evaluating the media mix of their communications strategies and taking advantage of new opportunities.
When it comes to digital content, it is vital to look at the current trends in media consumption. Cinema and OOH have naturally been hit hardest by the pandemic with people not leaving their homes. In contrast, many channels fuelled by digital have seen uplifts in reach and time spent. Across February and March year-on-year, connected TV viewing and video on demand consumption hours are up 59% and 40% in the UK. In China, time spent online shot up 20%, mobile gaming is up 44%, and first-time installs of the Netflix app were up 57% in Italy and 37% in Spain. With the increased amount of digital content being consumed, many film studios are now releasing their big cinema hits earlier than planned on digital.
Some, like Paramount’s The Lovebirds, are skipping their theatrical release altogether and will head straight to Netflix. This will permanently reduce movie theatres’ leverage with studios leading to an eventual shortening (or in some cases elimination) of the theatrical window for new releases.
More than ever, brands will need to treat content as a long-term strategy for brand building, showing empathy, and enriching consumers’ lives. Brands should avoid the pitfall of focusing on a few social media channels and think outside the box to come up with new ways of getting content in front of consumers. Current consumer digital behaviour is highly fragmented, ranging from live-streamed gigs being watched simultaneously by a group of friends, to memes being shared in closed messaging apps. Brands need to consider all touchpoints relevant to consumers to compete with the abundance of high-quality digital content now available.
In an environment where shops, restaurants and cafés are all shut down, and supermarkets are overwhelmed, digital commerce has become a lifeline for many businesses. Current demand across digital commerce platforms is vast, even though it is heavily concentrated in the groceries sector.
Italy and Spain, which have some of the lowest rates of digital commerce penetration in Europe (4% and 5% of total retail revenues), have seen a considerable spike in both penetration and frequency. According to the FT, supermarket chain Carrefour’s online customers in Italy had doubled to 110,000 and sales through its logistics start-up Glovo, are up more than 10-fold. China’s online grocery market is now expected to grow by 62.9% in 2020 vs 29.2% growth in 2019 (iiMedia Research).
Alibaba’s CFO Maggie Wu stated that the increased penetration and consumption of digital commerce in this time will “translate into sustainable, long-term growth,” which was also the case for them after the 2003 SARS outbreak in that region.
Therefore, the penetration of these platforms in households which previously have not taken advantage of digital commerce will have a permanent effect on the retail landscape and following the pandemic online retail demand will settle at a higher level than before. Brands will need to act fast and make data-driven decisions to adapt to the rapidly changing digital commerce landscape, and iron out any bottlenecks which may limit their digital commerce capacity going forward.
Events which have until now depended on the physical presence of attendees are quickly adapting to this new online-only environment. The Drum, for example, has been successfully running an online Digital Transformation Festival with high-profile guests and interesting content covering the most recent events and opinions. With the ease and accessibility of anyone tuning in whenever, however, and wherever they are (both listeners and guests) and also a structured and interesting agenda, this event proved that conferences and festivals (including Cannes) have the opportunity to move away from their current expensive and exclusive format and be democratised for all.
Speaking of exclusive, one of the most impressive responses to the pandemic came last week from the fashion industry. Shanghai Fashion Week became the first Fashion Week to be streamed online, creating a fully inclusive and virtual experience, with a direct connection to digital commerce. This gave rise to significant questions amongst fashion industry professionals as to the future of fashion weeks and the obsession with exclusivity in the fashion world. It also highlighted the lack of environmental or financial justifications for flying thousands of people from one country to another to attend 15 fashion shows and doing this multiple times in the space of a few weeks.
This will naturally have an impact on experiential marketing and the role of events for brands. Adoption of virtual festivals and gigs is accelerating at an incredible speed across social platforms, and brands which place experiential marketing at the centre of their communications strategies will have to adapt to this new reality.
Understanding changing consumer behaviour (whether in the content, digital commerce or experiential arenas) is key to any successful brand interaction and brands should re-evaluate their digital ecosystem, sponsorship and content opportunities accordingly.
Although it will be important for brands to respond to the risks and opportunities presented by the current state of affairs, this crisis will also remind us that real-life interaction is a big part of our basic human needs. Office drinks, gigs, pubs, holidays, sporting events and family gatherings, while enhanced by technology, can never be replaced by it. Brands will need to find a balance between adapting to new ways of working and changes in consumer behaviour brought about by the pandemic whilst remaining relevant to life after the pandemic.